At the CFPB, we believe all consumers have the right to achieve greater financial well-being for themselves and their families.
Over the past few years, we talked to consumers across the country to hear what they had to say about financial well-being and what it means to them. We learned that financial well-being means having financial security and financial freedom of choice, in the present and in the future. And we learned that an individual’s sense of financial security and freedom is very personal. That’s why people with the same income, financial experiences, or education can have very different levels of financial well-being.
Because financial well-being is deeply personal and not fully explained by simple economic factors, we also conducted research to help practitioners and researchers better understand and evaluate how consumers can achieve financial well-being, which many consider to be the ultimate goal of financial education efforts. We used this research to create a public tool—the CFPB Financial Well-being Scale—to help educators and others to accurately and consistently measure consumer financial well-being.
This new research pilot builds on the work we’ve already done. This project will help us to better understand how consumer financial well-being relates to consumers’ use of financial information and educational tools. The research will examine how engagement with educational information relates to consumers’ sense of financial security and financial freedom. We will also be exploring how financial well-being relates to consumers’ objective financial circumstances, such as whether a consumer has a mortgage, a student loan, or debts in collections, and to the consumer’s creditworthiness as measured by the consumer’s credit score.
Collaboration
This Project Catalyst research pilot will be done in collaboration with Credit Karma, a personal finance company that reportedly provides more than 75 million consumers with online access to credit scores, reports, and monitoring tools. The company has agreed to share insights with the Bureau from a survey it will conduct using the CFPB Financial Well-being Scale. In addition to the survey, Credit Karma will also share insights around peoples’ engagement with educational tools on its platform as well as information to help us to better understand how financial well-being may vary across people with different financial characteristics. As always, the information shared will be de-identified and appropriate precautions will be taken to ensure that individual consumers cannot be identified.
People with a higher sense of financial well-being more often report that they are on track to meet their financial goals. This research collaboration will build on our efforts to understand and promote financial well-being so we can empower more families to lead better financial lives.
CFPB’s Project Catalyst is an initiative designed to encourage consumer-friendly developments in markets for consumer financial products and services. In the past few years, Project Catalyst has launched several research collaborations with companies that are testing financial products or services. Through these projects, we can gain insight into how consumers make financial decisions and improve our understanding of innovations in the marketplace and what works for consumers.
Learn more information on Project Catalyst’s research collaboration with Credit Karma . Any organization may apply to participate in a research pilot. To learn more about the CFPB’s Project Catalyst initiative and its research pilot program.